Schwab SoundView Cuts Intersil to Neutral

Analyst Christopher Caso is concerned about the chipmaker's rising inventory

Schwab SoundView downgraded Intersil (ISIL ) to neutral from outperform.

Analyst Christopher Caso says late-quarter channel checks of this chipmaker indicate a slow close to the June quarter, with typical seasonal slowness likely compounded by growing distributor inventories. Caso believes distributor inventory of Intersil components has risen, providing an overhang that could potentially affect third-quarter sequential growth.

Caso thinks issues with the company's power-management business continues, with price cuts from earlier in the year having an impact on second-quarter revenues. He continues to think Intersil is following the correct long-term strategy, but says results are likely to remain underwhelming over the near term. He sees 20 cents second-quarter EPS, 84 cents in 2004, and $1.00 in 2005.

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